Procedural Justice in Entrepreneur-Investor Relations

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Abstract
This research used a procedural justice perspective to examine the impact of entrepreneurs' management of information flows in the form of feedback and influence on entrepreneur-investor relations. We conducted both an experiment with master's-level business students and a field survey of venture capitalists regarding their relations with the CEOs of their portfolio companies. The findings revealed the importance of timely feedback in promoting positive relations between investor and entrepreneur. Together, the studies provide strong evidence for the usefulness of procedural justice theory as a framework for understanding the management of interorganizational relations involving new ventures.